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Profitable since 2016, ~$621m in revenue 2020, $30.5m profit in 2020 Curious to see how the reception'll be for this, given they're not on the 'if we're not on
by chdaniel 5y ago
Profitable since 2016, ~$621m in revenue 2020, $30.5m profit in 2020
Curious to see how the reception'll be for this, given they're not on the 'if we're not on a loss, we're not spending enough money to grow' path
- 55555 5y agoFor the curious and lazy. where'd that money go? 168 million on R&D, 260 million on marketing&sales, 54 million on running the business, 10 million in interest payments Wonder what all that R&D is for. Maybe they are working on a coronavirus vaccine.
- mrcarruthers 5y agoSponsoring YouTube videos :P
- masklinn 5y agoThat would be the 260m marketing & sales budget I expect.
- european321 5y agoDoes R&D include things like salaries for engineers/product?
- Cshelton 5y agoI haven’t read the S1 yet, but typically yes. Unless they have a separate breakout, the R&D in this case would include engineering salaries.
- gen220 5y agoIt usually does. If a company really cares to follow GAAP to the letter, teams are supposed to estimate how much of their work should be categorized as maintenance or keeping the lights on, and that counts towards OpEx, while development work counts towards CapEx (R&D). Context is that Companies prefer to spend capex, because it produces “depreciable assets” (your soon to be legacy software system), that make financials look better. Then they use this to allocate a proportion of the salary towards one bucket or another. Of course the lines are fuzzy and arbitrary in many cases, but 80/20 Cap/Op is the typical net distribution in departments that employ software engineers, from what I’ve seen.
- otoburb 5y ago>>If a company really cares to follow GAAP to the letter, teams are supposed to estimate how much of their work should be categorized as maintenance or keeping the lights on, and that counts towards OpEx, while development work counts towards CapEx (R&D). The problem with following US GAAP 350-40-05-1D[1] to the letter is that if you capitalize development costs then you generally should only do this for internally developed software. If you "externally market" said software (which is now a capitalized asset on the balance sheet), which usually means selling to external customers upon which your revenue is then derived, you have to derecognize the capitalized asset before you can record any revenue. IFRS differs from FASB (US GAAP) in this regard; it's more in line with what you noted. Having said this, since Squarespace is based in the US and subjects themselves to US GAAP, they expense all of their R&D costs. Skimming the S-1 it was interesting to note the $10.6MM in R&D credits for 2020 only (possibly due to the pandemic; not sure). [1] https://fasb.org/jsp/FASB/Document_C/DocumentPage?cid=1176170115612&acceptedDisclaimer=true https://fasb.org/jsp/FASB/Document_C/DocumentPage?cid=117617...
- texasbigdata 5y agoOnly covers US W-2 labor. So perhaps that’s why. If only X% of labor force is elligeable and Y% of your FTE base is devs and Z% of their time is legitimate incremental novel work (defending one of those audits requires pulling GitHub/Jira/technical documentation support) then $11M is perhaps a reasonable number. YRMV.
- otoburb 5y agoI think it's less about the split between W2 FTEs and contractors, and instead that the R&D credits were likey government/state grants for high-tech innovation that helped to offset R&D costs, but Squarespace didn't really expand on this in their S-1.
- ryanSrich 5y agoSpending on sponsorships for what feels like 100% of all podcasts in existence.
- simias 5y agoSurely that's marketing&sales, not R&D.
- ryanSrich 5y agoAccounting can get weird for tax purposes, but you’re probably right.
- topicseed 5y agoYup, and some of these I'm not sure the audience is even into having their own website.......
- arcturus17 5y agoThe point of the solution is that it crosses the line between B2B and B2C so pretty much anyone can be a potential customer...
- spike021 5y agoNot just podcasts. Many of my favorite Youtube channels have websites built with it and then usually have an in-video advertisement with a promo code.
- ProAm 5y agoThere were VERY early on the podcast revolution. I would say they helped make the landscape we see in podcasts today possible.
- weego 5y agoI my bet is they'll be spending money like water on AI research to build base websites automagically for people based on their taste and industry and nothing will ever come of it.
- politician 5y agoCubespace. They're redeveloping their solution for 3D/AR/VR.
- rokob 5y agoR&D == software engineer salaries
- eloff 5y agoR&D is basically the expenses for software development - the cost of the product for a software company.
- markdown 5y ago$168M though? It's just a website.
- thebean11 5y agoIt's a tool to build and host websites, pretty big difference
- markdown 5y agoYes, but two devs in a garage could build this website that builds websites. Certainly not $170M worth of development.
- ZephyrBlu 5y agoI really hope this is a bad attempt at trolling.
- dna_polymerase 5y agoSo, why don't you do it then? Seems like there is a nice amount of money waiting for you.
- yreg 5y agoSo is Facebook.com
- machello13 5y agoThat's gotta be a joke?
- reggieband 5y agoR&D = Research and Development. In many orgs product development falls under R&D. That would include all of the people involved in developing the product including engineers, product owners, QA, graphic design, etc. One tidbit I recall about that is there are often tax grants for business development that include R&D expenditures. So while it often feels weird to think of your primary product as tangental to "research", there are potentially some tax benefits to categorize it as such.
- bostonsre 5y agoDisclaimer: I don't know much and I'm probably wrong. > CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (In thousands) Doesn't that mean they're not profitable? Or am I reading that wrong?
- nrmitchi 5y agoYou're reading it wrong. The section includes income, or loss, depending on the situation. Losses (negative income values) are typically represented with parenthesis. Income of $25000: 25 Loss of $25000: (25)
- bostonsre 5y agoThanks.
- bootwoot 5y agoThey're indicating explicitly that it's parentheses here with the text "INCOME/(LOSS)"
- computerphage 5y agoThe claim about typicality was to add addition information, not to speculate about this particular case.
- yreg 5y agoIf I considered investing, I certainly would not be worried about this company not spending enough on marketing.
- avipars 5y agotoo many superbowl ads